Journal

Solid Jobs Report — But Not for the Least Educated

The September jobs report was solid, with employment growth of 156,000 just shy of expectations, and unemployment was nearly steady. Even better, the employment-population ratio for adults 25-54 jumped back up in September to 78.0%, tied for a post-recession high and up from 77.3% a year ago.

However, the national headline numbers can mask huge variations in the labor market. Indeed breaks down the monthly jobs report to see how widely shared the gain or pain is. We look at the change in employment in higher-wage, middle-wage, and lower-wage industries; the change in unemployment by education level; and the change in employment by region of the country. (The regional data is for August and was released a couple of weeks ago.)

Our breakdown shows that the September jobs gains were concentrated in lower- and middle-wage industries and among adults with college degrees. Regionally, the South and West continue to outpace the Northeast and Midwest.

Middle-Wage Industries Led September Job Growth

The national increase in payroll employment for September was 156,000, an 1.3% (annualized) month-over-month increase from August and a 1.7% year-over-year increase from September 2015. However, job growth was weaker in higher-wage industries, at just 1.1% (annualized) month-over-month in September.

It’s not just September: job growth in higher-wage industries has lagged throughout much of the economic recovery. Middle-wage industries — including most construction industries — suffered the worst job losses during the recession, and lower-wage industries have had the largest job gains over the past five years.

Unemployment Jumped For the Less Educated

Unemployment rose slightly to 5.0% in September, but the better indicator of worker health — the prime-age employment/population ratio — returned to its post-recession high of 78.0%, up from 77.8% in August and 77.3% in September 2015. That’s good news.

But the unemployment numbers weren’t good news for everyone. Unemployment among adults age 25+ with only a high school degree or less jumped by half a percentage point, from 5.5% in August to 6.0% in September. And it’s not because they returned to the labor force: the employment/population ratio for adults 25+ with only a high school degree or less fell by three-tenths of a percentage point. These challenges were concentrated among adults with less than a high school degree, not those with a high school degree.

For adults with some college, an associate’s degree, or a bachelor’s degree, unemployment fell and the employment/population rose in September, despite the slow job growth in higher-wage industries.

Today and throughout the economic cycle, unemployment is lower for adults with more education. Unemployment rose more in the recession for the least-educated adults, and the bigger declines in unemployment for the least-educated have largely restored the differences in unemployment by education level that prevailed before the recession.